[Posted 4:30 PM ET, Friday]
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Edition 1,432
Thursday PM, President Trump posted on Truth Social:
“I stated, numerous times, that it would take 4-6 weeks to get rid of the IRAN NUCLEAR THREAT, and I did it in one night! The rest of the time is just to make sure it stays that way.”
But you cannot claim you have rid the world of Iran’s nuclear threat when there have been zero inspectors on the ground there for years.
To beat a dead horse, President Trump has been making a major unforced error in not enlisting the help of the International Atomic Energy Agency and its Director General Rafael Grossi.
Trump has issues with the public on the conduct of the war, and it hasn’t helped he made no real attempt to sell it, and Grossi and the IAEA, who’ve been excluded from conducting the intrusive inspections of Iran’s nuclear program are sitting there for the president’s use.
Just an example, we know there is increased activity at Pickaxe Mountain, where it is rumored some of the enriched uranium stockpile, and/or centrifuges, may be, and that’s what the IAEA can uncover.
Iranian Foreign Minister Abbas Araghchi reportedly raised the idea of restoring nuclear inspectors’ access in exchange for sanctions relief, and the administration should call his bluff.
Get the IAEA on the ground, and when Iran stonewalls the inspectors and doesn’t grant the promised access, then Trump and the United States can blast this out to the world, Grossi at his side…before launching an intensive new bombing campaign.
Meanwhile, the president did get a win of sorts today when the Group of Seven major economies agreed to release 100 million barrels of crude oil and fuel from their emergency stocks within four months and not to restrict oil exports, French President Emmanuel Macron said Friday, in an effort to bring down the soaring price of diesel and other fuels.
The announcement ends the threat of a U.S. ban on diesel exports, at least for now, an act which would have killed Europe in particular.
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Oct. 2…$91.40
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, Oct. 2…regular $4.39; diesel $6.37
As it went down day-by-day in the Iran War….
Saudi Arabia’s capital came under attack from Houthi militants in Yemen on Saturday – the latest sign of Iranian-backed groups stepping up hostilities against U.S. allies in the Middle East.
Saudi-backed coalition forces in Yemen said air defenses intercepted two drones launched by the Houthis toward Riyadh, as well as a ballistic missile targeting the southern border area of Khamis Mushait.
Also Saturday, President Trump rejected Iran’s proposal to reopen the Strait of Hormuz within a week if the U.S. meets certain conditions, saying Iran wanted to make a deal because it was “losing so badly.”
Meanwhile, Iranian media outlets said the country’s president had left New York after the United Nations gathering of world leaders that included Iran’s indirect talks with the United States.
“They want to make a deal and I think that’s fine,” Trump told reporters outside the White House before leaving for a college football game. “I’d like to make a deal, too. But that deal would not be acceptable.”
Trump also said the U.S. already had “total control” of the Strait, with “massive amounts of oil” passing through it.
Iranian Foreign Minister Abbas Araghchi told journalists Friday night that under Tehran’s proposal, Iran would reopen the Strait and resume talks on its nuclear program in seven days if the United States lifts its naval blockade of Iranian ports, waives sanctions on Iranian oil sales and observes a ceasefire that would include Lebanon.
Araghchi wrote on Telegram that he would await the “definitive views” of mediators, and that Tehran “will make a decision based on that.”
Separately, Iranian President Masoud Pezeshkian said in an interview with CBS News that aired Sunday that from his view as a physician, Supreme Leader Mojtaba Khamenei has “no specific ongoing health issues,” despite not being seen or heard in public since the war began in February.
Pezeshkian described his most recent meeting with Khamenei as lasting over seven hours. When asked whether the supreme leader’s face and legs have recovered, Pezeshkian responded, “Yes.”
Back to Trump’s position, he is skeptical Iran would meet his demands and has told his staff that he sees a renewed bombing campaign as likely, officials said. The president told Axios in an interview on Sunday that Iran has overplayed its hand. Trump added that he expects negotiations to resume this week even though he rejected Iran’s latest proposal, Axios reported.
The Wall Street Journal reported Tuesday that Iran’s ability to choke off oil flowing through the Strait – and use that as leverage in talks with the U.S. – is breaking down, raising the risk it will resort to military escalation to bolster its position.
The erosion of Iran’s position comes as the U.S. Navy and Gulf oil producers have become better at fending off or evading Iranian attacks, allowing more tankers to cross the Strait.
Middle Eastern crude exports rebounded this month to around their highest level since the war began in February, oil data trackers say. Shipments via Hormuz and bypass routes were delivering just under 80% of their prewar regional flows as of last week, according to tracker Kpler.
So far this month, crude exports from major Middle Eastern producers including Saudi Arabia, Iraq, the U.A.E. and others – moving through Hormuz and alternative routes – have risen to almost 13 million barrels a day. That is the highest total since February, when the region exported nearly 19 million barrels a day, according to ship tracker Huax.
Saudi Arabia is also starting to pump crude through its damaged East-West pipeline and load it on tankers in the Red Sea, though volumes remain reduced.
Iran, by contrast, has been unable to move crude through Hormuz since the U.S. reinstated its maritime blockade in July. The stores of oil that Iran had stockpiled beyond the blockade could run out my mid-October, Kpler estimates, choking off a vital source of revenue as the country’s economy buckles under the pressure of sanctions and the strain of war.
But with its own oil income dwindling and its neighbors finding workarounds, Iran might see renewed attacks as its best remaining means of applying pressure, even at the risk of American retaliation.
Gulf oil producers fear their energy infrastructure could be exposed to new attacks.
The Revolutionary Guard also coordinates a network of regional militias.
Tuesday, Gen. Hossein Mohebbi, spokesman for the IRGC, said that the only way for the war in Iran to end is for Washington to admit defeat and leave.
He spoke at a news conference in Tehran, reading from what he called a “letter to the American people.” The message was apparently meant for the U.S. public just weeks ahead of the Nov. 3 midterm elections.
Later, in remarks to the Associated Press, Mohebbi urged Americans to reconsider their leadership and take to the streets and protest Trump’s policies to denounce what he called the U.S. government’s warmongering policies.
He accused the United States of using Iran’s nuclear program as a ruse to “plunder Iran’s wealth” and to turn the country “back into a colony.”
Meanwhile, Iran’s currency fell to a new record low Tuesday, with traders in Tehran exchanging more than 2.5 million rials to the U.S. dollar.
Pakistan announced it will use “whatever means are available” to defend Saudi Arabia against the Iran-backed Houthis, the country’s defense minister said Tuesday, offering one of Islamabad’s clearest indications yet that it could become directly involved in the widening regional conflict.
Saudi-backed Yemeni forces hit the Houthi homebase of Saada with intense airstrikes.
Iranian officials indicated Wednesday they have received an official U.S. response to Tehran’s latest proposal to end the seven-month war.
The official did not say what the response contained and whether it was a rejection.
Iranian Foreign Minister Araghchi presented the U.S. response to President Pezeshkian.
“We will make every effort to bring the agreement to fruition and will firmly stand up for the rights of the Iranian people,” Pezeshkian said. “The agreement must now be based on a win-win strategy.”
Thursday, we learned the Pentagon was sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, as reported by the Wall Street Journal, and according to U.S. officials, adding 9,000 to 10,000 more troops to the region as President Trump considers renewing strikes on Iran after the midterm elections.
But there is some question as to whether the USS Theodore Roosevelt, which left its home port of San Diego on Sunday on a scheduled deployment, is the third carrier, or merely replacing the USS George Washington, which would have the Washington go back to its home port in Japan. [The third carrier is the USS George H.W. Bush.]
We’ll learn soon enough.
–As reported earlier in September by Haaretz, UAE President Mohammed bin Zayed did in fact warn Prime Minister Netanyahu of a ‘major attack’ by Hamas shortly before October 7, 2023, two sources, including a person who spoke directly with the Emirati leader, told the New York Times. Netanyahu has denied such a conversation took place.
The Times report comes a day after a former senior Palestinian official told an Egyptian media channel that he met with Israeli intelligence officials weeks before the Hamas onslaught after conveying a warning from Hamas’ leader Yahya Sinwar in Gaza that he was about to “put cards on the table that will cause an earthquake.”
Earlier, Haaretz revealed that then-Shin Bet chief Ronen Bar briefed Netanyahu on the meeting with Abu Zaida (a former senior Palestinian official) on September 15. Two days later, senior defense figures held an urgent discussion on Sinwar’s threat which ended without concrete decisions.
A week after that, on September 26, Egypt’s then-intelligence chief, Abbas Kamel, reportedly came to Israel to deliver a warning that Hamas was preparing for something big. According to a report in The Atlantic, which cites Israeli, Egyptian, Arab, U.S. and European officials briefed on Kamel’s visit, he recommended that the Israelis grant Hamas economic concessions to prevent a confrontation. It is unclear with whom Kamel met during his brief visit, the report said.
Another report from the Wall Street Journal has Kamel calling Netanyahu with a warning about an impending attack from Gaza early in October. The prime minister’s office has denied there were conversations between the Israeli leader and Kamel in the months leading up to Oct. 7.
Last weekend, Netanyahu visited the UAE to meet with the Emirati president, Sheikh bin Zayed, the two leaders’ offices confirmed on Monday. Both offices said the meeting focused on “strengthening relations between the two countries and on regional challenges.”
—The U.S. military announced on Wednesday that it has completed the withdrawal of all American troops from Iraq, ending a 12-year mission to fight the Islamic State group. The last U.S. troops left an air base in northern Iraq under a deal between Baghdad and Washington.
The withdrawal, agreed on two years ago, comes against the backdrop of the ongoing war between the United States and Iran that has also sometimes spilled over into Iraq, with Iran-backed militias firing on U.S. troops and the U.S. striking the groups’ strongholds.
Baghdad touted the end of the U.S. mission as a sign of the country’s increasing strength and sovereignty, but the withdrawal was also celebrated by Iran-backed groups and raised concerns among some other Iraqis.
—Separately, on Sunday, British police stopped what appears to have been a terrorist plot against a key military facility in the UK, used by the U.S. Air Force, with American B-52 and B-1 bombers based in Fairford, where they have been seen flying to the Middle East since the latest hostilities with Iran began end of February. The U.S. has a longstanding presence there since 1944 and preparations for D-Day.
“They were looking to do big damage to our fort, and working with the British worked out great,” President Trump said on Sunday morning. “We had them [the suspects] under view for a long time, and we got them.”
Due to British privacy laws, it wasn’t immediately known who the five suspects arrested are and the motives, but it’s suspected there could be a Iranian Revolutionary Guard Corps linkage.
The suspects aren’t named until they are charged, but are being held on suspicion of preparing an act of terrorism; though police did say the men are all British nationals from London and in their 20s. They can be held in custody for up to 14 days before they must be charged or released.
The IRGC warned the British government this summer not to let UK bases be used in connection with the war. “Any base used to launch attacks on Iranian territory is a legitimate target for our forces,” the IRGC said.
But thankfully, U.S. and British intelligence work closely together.
Monday, Iran denied involvement, the London embassy saying it “categorically rejects and strongly condemns the recent unfounded and malicious speculations” about the incident.
The five were then released on bail on Monday in what police described as an “investigative decision” “grounded in experience and strategy.”
Tuesday, police said a quantity of petrol but no explosive devices were found during searches of the three vans.
We then learned one of the five men arrested had then dialed 999 (the Brits’ 911) himself, an hour before the female farmer also dialed 999 after seeing men in balaclavas.
But senior U.S. and Western officials said they picked up intelligence in recent days about a threat from Iran, and stepped up security at military installations across Europe in response, including at RAF Fairford.
So were the men arrested Iranian operatives, petty gas thieves, or both?
Or, were they unwitting operatives connected to broader Iranian plans involving possible attacks against American military bases across Europe. Iranian operations routinely employ such crews.
Secretary of State Marco Rubio said Monday the suspected terror plot at Fairford “clearly involves the hands of a foreign actor.”
Wednesday, in an interview with the BBC, Prime Minister Andy Burnham said his government believes Iran “played a part” in the incident Sunday. He said, “It remains an ongoing, complex and serious police investigation, and of course we are working closely with our colleagues in the United States of America.” He added the British government “will say more in due course.”
Thursday, police arrested a dual UK-Iranian national on suspicion of plotting a terror attack following the incident at Fairford.
A 27-year-old was arrested in London, and police have searched two properties in the UK capital, Counter Terrorism Policing said in a statement.
—What a near catastrophic event we had early Tuesday, as a FlyDubai plane heading for Israel made a harrowing emergency landing after one pilot stabbed the other in the cockpit – an attack Israeli Prime Minister Netanyahu described as an attempt to crash the aircraft.
Passengers and crew rushed forward and stopped the attacker as the plane hurtled toward the ground before making a safe landing in Saudi Arabia.
“During the flight, as they approached the country, one of the pilots stabbed the second pilot, and apparently tried to crash the plane with everyone on board,” Netanyahu said.
It turns out the co-pilot stabbed the captain, who despite being seriously injured, apparently pushed a lever/button to open the cockpit door.
The Boeing 737 MAX 8 aircraft plunged more than 14,000 feet in under 30 seconds, according to flight tracker.
FlyDubai, the sister airline to the long-haul carrier Emirates, said on-duty staff for the airline traveling on the flight safely landed the aircraft in Tabuk in western Saudi Arabia, though we saw Israeli passengers play heroic roles in saving the plane and their fellow passengers.
Thursday, Netanyahu said there was evidence the co-pilot “underwent Islamist radical indoctrination.”
But as we saw above in the Oct. 7 reporting, Netanyahu, in an intense election season that has him fighting for his political survival, in the words of Haaretz, “will try to turn even mud into gold: He met with the brave survivors and had his photo taken with them, in the hopes that a bit of the stardust will stick to him….
“In the spirit of the temporary unity, the news anchors chose to ignore the prime minister’s salient penchant to be what sports buffs call a fair-weather fan. The first to push his way into the airport, where everyone is smiling; the last to visit Kibbutz Nir Oz, when all that’s left to have your picture taken with are burnt homes and mourning and angry kibbutz members.”
—
Wall Street and the Economy
We learned a bit more over the weekend about the U.S. and China trade negotiations following the Trump-Xi summit.
The two sides agreed to a $30 billion reciprocal tariff reduction and to launch a bilateral dialogue on artificial intelligence, two tangible outcomes.
The two sides also confirmed plans for the leaders to meet twice more this year, at the Asia-Pacific Economic Cooperation summit (APEC) held in the Chinese city of Shenzhen in November and the Group of 20 leaders meeting in Miami the following month.
Trump and Xi agreed to build a “constructive relationship of strategic stability” during the summit, said a statement from China’s Ministry of Foreign Affairs on Saturday.
Beijing and Washington had already agreed to extend a bilateral trade truce until mid-January, Treasury Secretary Scott Bessent announced a week ago Wednesday.
The White House said late Friday that the reduction of tariffs will cover nonsensitive goods, including U.S. exports of agricultural* and medical products as well as Chinese exports of small appliances and toys.
*China has never met its commitments on agriculture, though Trump acts like they have for obvious political reasons.
Meanwhile, bilateral tensions – on issues like Iran, Taiwan and AI – simmered below the surface of the summit.
Beijing and Washington confirmed that they will set up bilateral communication channels for AI issues, but didn’t provide any details on the channels.
No AI talks are lined up before November.
And the Chinese statement didn’t mention rare earths. [More on this below.]
In the end, Xi got a good photo op for consumption back home, as well as a gold eagle (Trump’s gift of choice for leaders), and Trump got…ahh…nothing.
On the economic data front, we had the August personal consumption expenditures index, PCE, the Fed’s preferred inflation barometer, and it came in better than forecast across-the board. On headline, up 0.3%, 3.4% year-over-year; while core, ex-food and energy, was 0.2%, 3.0%, this last one the money ball and four-tenths less than expected.
The data also showed that personal consumption (spending) rose at its fastest pace in over a year, while personal income in August was less than forecast.
Some analysts said the way the PCE is calculated has changed, while much of the data is old and doesn’t reflect the steep rise in diesel, which works its way through the price chain over time, and in the end, bond yields rose a bit on the long end, while odds for a rate hike in October fell. [No way was the Fed going to act a week before the midterm elections…that’s always been my belief.]
New York Fed President John Williams made some comments Tuesday, suggesting that the Fed could wait until December before raising interest rates again. At a speech in Buffalo, N.Y., Williams said: “With the policy action we took at our September meeting, there is no need for urgency.”
We then had the September jobs report today, Friday, and it was a big miss…just 29,000 when 90,000 was the consensus, while August was revised down from 162,000 to 133,000.
Average hourly earnings in the month rose just 0.1%, and 3.0% year-over-year, lowest pace since May 2021.
The unemployment rate ticked up to 4.2%.
Wall Street celebrated the numbers as it solidified the view that the Fed will not hike rates at the October meeting.
In other data, the S&P Case-Shiller 20-city home price index rose 2.5% year-on-year in July, the strongest increase since May 2025 and above expectations. Chicago led the major metros for a fifth straight month, with prices up 6.9% Y/Y, followed by New York (+5.8%) and Cleveland (+4.2%). Seattle recorded the largest decline for a second consecutive month (-1.6%), followed by Las Vegas (-1.3%) and Denver (-1.1%).
After adjusting for inflation, home prices declined for a 14th consecutive month, with 3.4% inflation outpacing nominal price growth.
The September ISM manufacturing reading was basically in line, 54.5 (50 the dividing line between growth and contraction), while the Chicago PMI was a robust 58.5.
August factory orders rose 0.1%.
But lastly, we also had a final look at second-quarter GDP, up 2.2% vs. 1.5% prior, while Q1 was revised upward from 2.2% to 2.5%.
The Wall Street Journal opined:
“(If) the economy is good, why do Americans feel so glum? The likely answer is the hangover from the Biden inflation, which continues to erode wage gains and make it hard to save. Border taxes and higher gas prices haven’t helped. Yet despite the prophecies that the war in Iran would plunge the U.S. into a recession, the evidence is that America’s economic animal spirits are alive and well.”
Looking ahead, the Atlanta Fed’s GDPNow estimate for third-quarter growth is 3.7%.
But Freddie Mac’s 30-year fixed-rate mortgage soared to 7.28% this week, up from last week’s 7.03%, and the highest since Nov. 2023.
We have no market-moving economic data next week, and earnings season doesn’t kick in in earnest until the week of Oct. 12, so it will be largely about oil…again.
—
One other issue…President Trump said former Federal Reserve Chair Jerome Powell should resign from the central bank’s Board of Governors over findings the central bank mismanaged the renovation of its headquarters.
“The Building is over budget, at a Record Setting rate and, at a minimum, ‘Too Late’ Powell should be forced to resign from the Board,” the president posted on Truth Social.
Trump’s remarks came after the Fed’s internal watchdog, in a report released Wednesday, found no evidence of criminal wrongdoing and didn’t identify any “administrative misconduct” connected to the $2.4 billion project.
Nonetheless, the report outlined a series of management missteps that caused the project’s cost to balloon from the initial estimates of $1.3 billion in 2020.
The president said he had directed Attorney General Todd Blanche to study the inspector general’s report “and make a determination as to what to do.”
Ridiculous.
Editorial / Wall Street Journal
“(The) key conclusion here concerns the accusation of criminality. ‘At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred,’ [Inspector-General Michael] Horowitz writes. ‘Further, while our report outlines deficiencies in the management of the renovation project…we did not identify administrative misconduct during our evaluation.’
“This is a political opportunity. Mr. Powell has bucked convention to linger on the Fed board past his chairmanship ostensibly to defend the Fed’s independence from Mr. Trump. The report now offers reassurance that Mr. Powell is in the legal clear. This clears the path for Mr. Powell to resign in line with tradition and do his part to de-escalate the unhelpful political battles that have ensnared the Fed.
“Then the GSA can finish the building, the Fed can worry about monetary policy, and Mr. Trump can talk about the growing economy. Or so we can dream.”
Europe and Asia
We had a flash estimate for September inflation in the eurozone Friday, up 3.8% from 3.2% in August, according to Eurostat. Ex-food and energy, however, the figure is 2.2% vs. 2.1% in August.
Headline inflation….
Germany 3.3%; France 3.4%; Italy 4.1%; Spain 5.0%; Netherlands 3.0%; Ireland 3.8%.
And we had the August manufacturing PMIs for the EA21, courtesy of S&P Global.
The euro area figure was 52.9, a 52-month high, solid.
Germany 53.9; France 50.6; Italy 50.4; Spain 51.0; Netherlands 55.6.
UK: 51.9
Chris Williamson, Chief Economist, S&P Global:
“September has seen a further encouraging improvement in manufacturing growth across the eurozone, with the rising tide lifting all ships as the upturn has also broadened out to cover all surveyed member states. Measured across the euro area, production is rising at a rate not seen for four and a half years as firms boost capacity to meet rising demand.
“Order book growth is also now sufficiently strong to encourage factories to take on additional staff, ending the continual loss of factory jobs that had been reported over the prior three years.
“The upturn is being driven by rising demand for investment goods such as machinery and equipment… This reflects higher demand for AI and defense-related equipment in particular.
“Demand for consumer goods continues to fall, however with the increased cost of living acting as a drag on household spending. It’s therefore worrying to see both input costs and selling prices rising at increased rates again in September, which will fuel speculation about additional rate hikes from the ECB.”
Turning to Asia….
China: The National Bureau of Statistics official manufacturing PMI for September was 50.1; non-manufacturing 50.2.
The private RatingDog manufacturing PMI for the month was 52.1; services 51.6.
Japan: The August manufacturing PMI came in at a solid 54.1.
August retail sales rose 2.7% year-over-year.
South Korea’s August manufacturing PMI was 53.9. Taiwan’s 56.7. [China sees this and is jealous.]
Street Bytes
—Stocks finished mixed on the week, the Dow Jones down 1.3% to 51177, the S&P 500 down 0.3%, but Nasdaq gained 0.5% and is just shy of its all-time high.
—U.S. Treasury Yields
6-mo. 4.28% 2-yr. 4.83% 10-yr. 5.28% 30-yr. 5.64%
We had wild swings in the Treasury market this week, the yield on the 10-year soaring to 5.34% on Wednesday, highest since 2002, before falling to 5.15% in the minutes after Friday’s jobs report, and then settling where you see it above, yes right back up!
The 2-year peaked at 4.94% before falling…and rising.
Declines in the oil price at the end of the week helped, but the bond market also began separating perceived winners from losers among the debt of developed countries.
Germany was a beneficiary, its 10-year ‘bund’ yield falling from 3.60% last Friday to 3.46% today.
But France, with its multiple economic issues, saw its 10-year yield rise to 4.87% from last week’s 4.69%.
—OpenAI’s artificial intelligence went rogue and meddled with the websites for the Education Department, the Commerce Department and the Securities and Exchange Commission this summer without the AI lab’s knowledge, according to security researchers and a person familiar with the episodes.
The incidents involving the Commerce Department and the S.E.C. were confirmed by OpenAI, which said it was continuing to investigate the situation with the Department of Education. The San Francisco company said it had notified the government agencies in recent weeks that its AI agents – which are bots that can act autonomously – interacted with their sites in unusual ways.
With the Education Department, OpenAI’s technology tried to hack the website to gather data from the department’s civil rights office but failed, researchers from the AI research firm Transluce said. The AI also pulled data from the Census Bureau website, which is housed at the Commerce Department, using login credentials it found online. Separately, OpenAI’s agents shared public data from the S.E.C. website on an online forum.
None of the incidents were breaches, OpenAI said, but were examples of its technology’s behaving in unexpected and concerning ways. The company recently discovered the occurrences while conducting a review of hacks carried out by its technology, including an attack on an Australian government website in June and on the AI start-up Hugging Face in July.
CEO Sam Altman said in a social media post on Friday that the company had “not been as fast as we would have liked” in disclosing AI incidents. He’s also called for guardrails, without which society could “lose control of the future to AI.”
Dario Amodei, CEO of rival Anthropic, has also supported slowing AI development to prioritize safety. But other tech leaders like Nvidia’s Jensen Huang have said fears about uncontrollable Ai are unrealistic. President Trump has said he does not believe a slowdown in the AI industry is necessary.
Microsoft co-founder Bill Gates warned that artificial intelligence is a “powerful enough” tool to kill off a substantial portion of humanity, joining a growing chorus of tech leaders and employees calling attention to AI’s existential risks.
“AI is certainly powerful enough to drive events that, you know, cause a billion deaths,” Gates said in an interview with NBC’s Meet the Press. “There’s never been a weapon as powerful as the combination of people with ill intent using the latest AI tools.”
In the interview, Gates said self-regulation is not enough. “You need law enforcement and the politicians to get into the discussion about what safeguards and monitoring look like,” he said. “And that has to be a required thing.”
Gates previously argued in an August essay that bad actors could use increasingly powerful AI tools for cyberattacks, fraud, disinformation and other forms of large-scale harm against hospitals, financial institutions, power grids and government systems.
Research leaders at OpenAI, Anthropic, Meta Platforms and Microsoft are asking policymakers to probe the degree to which their companies have automated artificial-intelligence research, joining industrywide calls for greater oversight of the technology.
In a paper published Monday, the researchers wrote that automating AI research could set off an “intelligence explosion.” Such a development could compress years of progress into months or less and outpace humans’ ability to understand it, the authors said.
The paper’s authors said policymakers should urgently demand more visibility into how far companies have already automated their own model development. AI research pioneers including Geoffrey Hinton, who worked at Google for roughly a decade, and Yoshua Bengio are among the co-authors.
As humans step back, the authors of the paper wrote, they might lose the chance to catch problems and expertise to solve them.
The authors pointed to OpenAI agents’ Hugging Face hack. The operation was so large that independent researchers who reviewed the incident under an agreement with OpenAI, said they had to rely on AI to analyze it.
OpenAI then said on Monday that it would not release its newest artificial intelligence model because of security concerns raised by its researchers.
During the testing phase for the new model, known as GPT-6.1 Astra, it showed high levels of what the company saw as deception, or a willingness to mislead users about its actions. The model was also willing to go beyond the original scope of what it was asked to do, without checking back for directions or instructions.
“For anything regarding safety and alignment, there’s a trade-off,” said Saachi Jain, the head of safety systems at OpenAI. The new model “didn’t quite meet the bar in terms of staying within scope and authorization, and how it communicates back to the user about the type of work it’s done.”
Pope Leo XIV said Monday that concerns about artificial intelligence going rogue are not “fake news” and should be taken seriously, insisting that safety issues raised by AI experts should be discussed and acted on.
Leo, who dedicated his first encyclical to AI and protecting humanity in its wake, was asked during a press conference about what the United States and China especially should be doing to prevent AI from posing catastrophic risks to humanity. President Trump has called concerns about AI going rogue a “hoax.”
“This is a problem that, I think, we need to sit down and talk about,” the Pope told reporters returning home from France. “We can’t just sit back and pretend nothing is going to happen.”
–Back to Nvidia, the chip giant, flush with cash, announced it is launching the largest-ever U.S. stock buyback.
The company on Monday said its board has approved a $150 billion increase to its share-repurchase program, bringing the total buyback authorization to $235 billion.
The authorization eclipses the $110 billion stock buyback that Apple unveiled in May 2024 and comes just four months after Nvidia’s board added $80 billion to the buyback program.
“Nvidia’s growth is being driven by a once-in-a-generation platform shift to AI and accelerated computing,” said CEO Jensen Huang. “Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders.”
The company reported August record sales of $96.2 billion for the quarter ended in July.
Nvidia said last month it would partner with Wall Street firms and partially guarantee up to $500 billion in data-center financing to better help its customers afford its chips. The company also agreed to backstop OpenAI’s data-center project in Ohio.
Nvidia then made available on Monday a set of software safety tools for AI agents that it says would have stopped the hack of Hugging Face, the AI coding hub that Nvidia paid $14 billion for months after it was swarmed by rogue agents from OpenAI.
Huang has rejected calls for broad AI safety regulations and instead framed the escaped agents as an engineering problem to be solved, akin to making automobiles safer.
–And back to Anthropic, a prospectus for its pending IPO was leaked (Reuters appears to have first obtained a copy), and the company is making a massive bet that AI will transform the global economy more profoundly than industrialization, electricity and the internet.
But the cost to get there will be staggering. Anthropic reported a net loss of $42 billion in 2025, and plans to spend $518 billion on cloud, computing and infrastructure obligations in coming years, according to the prospectus.
The prospectus details how the company has grown sharply in the last year – while also posting wider losses. Revenue grew 12-fold in 2025 to nearly 44.6 billion, even as the company lost more than $8 billion on an operating basis, excluding writedowns.
Anthropic said nearly a quarter of its revenue came from two customers last year, and as part of its risk factors, warned that many of its largest clients were not locked into long-term contracts and could cut or stop spending.
The company does warn its AI models pose a “catastrophic or existential risk to humanity, and can have “self-preserving behaviors,” including being able to “resist shutdown,” “conceal or manipulate information,” and carry out behaviors “resembling blackmail,” per the prospectus leaked to Reuters.
—Tuesday, President Trump said that he and a large group of leaders of AI companies had signed a voluntary accord that will include internal and external reviews of the technology during a meeting at the White House.
“I think I’m seeing tremendous self-policing. And they understand that they have to self-police,” Trump told reporters outside the West Wing, surrounded by some of the tech titans.
After their lunch, Trump said there had been widespread agreement on “self-regulation” by the AI developers, “and we automatically have regulation with the Department of Justice, the FBI, all of that.”
He also said the executives had agreed to assuage the bipartisan opposition to data centers cropping up in local communities across the country, by providing more financial support to local schools or taking steps to reduce energy costs.
“You’re going to see, data centers are going to be very popular,” Trump said. If the opposition continued, Trump suggested, “they’ll be forced to go overseas or other locations.”
The president said the agreement signed was “morally binding” on developing the technology safely.
He signed an executive order rebranding “artificial intelligence” as “super intelligence,” SI.
[I will not conform to the order…just as it’s still the Gulf of Mexico and Lake Ontario.]
Earlier in the day, Trump promised that the U.S. government wouldn’t limit the development of artificial intelligence or support calls for “guardrails” or other restrictions.
“I will never stifle the growth of a technology that will be bigger than the industrial revolution,” Trump said at the unveiling of an AI chatbot, America.gov, intended to help Americans navigate government services. “We can’t stifle it, and we’re leading by a lot.”
And then on Wednesday, we learned the U.S. Federal Trade Commission has opened an investigation into OpenAI, Anthropic and other AI companies over dangers their technology may pose to consumers, the agency said.
There were no other comments from the FTC. The timing, coming a day after a big show at the White House, was interesting.
—Boeing has identified a 737 software glitch that could cause an automated navigation feature to fail, prompting concerns about a potential safety risk while planes are landing.
The glitch hasn’t been publicly disclosed. It emerged from a cockpit software update and can occur when flight crews alter their planned flight path following a missed approach. In a certain scenario, pilots may have to fly manually without some autopilot functions. That, some industry officials said, could overwork pilots while they are already busy, at low altitude and possibly dealing with situations like bad weather.
The aerospace giant, airlines and regulators have been assessing the glitch and whether it poses a flight safety issue.
Boeing notified 737 MAX operators in late August about the glitch, saying that it didn’t pose a safety risk, according to a company document viewed by the Wall Street Journal.
Southwest Airlines and United Airlines have told Boeing that they don’t want to receive new 737 MAX planes equipped with the flawed software, and instead requested an earlier version of it, according to industry officials.
The Federal Aviation Administration is investigating the new 737 MAX issue and will take action if needed, a senior agency official said.
The stakes are high for Boeing because its 737 MAX has a checkered safety record and it has been working to restore trust with regulators, airline customers and the flying public.
It wasn’t immediately clear how many 737 MAX jets might be flying with the flawed software. Boeing said it was working on an accurate count; airlines aren’t required to inform the company if they upgrade their software. There are 2,422 of Boeing’s 737 MAX 8 and 9 models currently flying around the world, according to aviation-data firm Cirium.
Separately, Boeing received some big news on Tuesday as it was selected to build the Navy’s sixth-generation carrier-based strike fighter, dubbed F/A-XX, icing out what was considered to be its biggest competitor in late-stage negotiations, Northrop Grumman.
Inked at $20 billion for the full-scale development phase, the contract, according to a Pentagon release, “procures multiple test aircraft for ground, airworthiness, systems, and weapons integration testing.”
Boeing’s contract award marks another milestone victory for the company, which has now all but guaranteed its monopoly on sixth-generation fighters across the services.
—TSA checkout numbers vs. 2025
10/1…124 percent of 2025 levels
9/30…110
9/29…77
9/28…91
9/27…128
9/26…72
9/25…98
9/24…126
—Memory giant Micron reported its fourth quarter earnings after the bell on Wednesday, beating Wall Street’s expectations on the top and bottom lines and offering a better-than-anticipated Q1 outlook.
For the quarter, Micron reported earnings per share of $33.42 on revenue of $54.23 billion. Analysts were looking for EPS of $31.83 and revenue of $51.49 billion.
The company saw EPS of $4.04 and revenue of $11.31 billion in the same quarter last year.
For the second quarter, Micron is projecting revenue of between $60 billion and $63 billion; with the Street calling for $56.77 billion.
Micron’s fortunes, along with those of fellow memory chip producers Samsung and SK Hynix, have soared amid sky-high demand driven by the global AI build-out.
Data centers require massive amounts of DRAM, used in high-bandwidth memory that goes into AI processors, including graphics processing units (GPUs), as well as ultra-fast flash storage. Micron produces both of those.
Micron’s share price has soared roughly 275% year to date and 550% over the past 12 months as of Wednesday.
And the company is making big bets on its future growth. In August, the company announced that it would invest up to $10 billion over the next 10 years to build out a “long-horizon premier research institution” in Boise, Idaho.
But the boon in memory makers is taking a toll on other sectors of the tech industry.
Consumer electronics manufacturers have raised prices on their devices to offset the rising cost of memory and storage chips. Most recently, Apple raised the prices of its iPhone 18 Pro line by $100 compared with its iPhone 17 Pro.
–Shares in struggling sneaker giant Nike fell as much as 10% in after-hours trading on Thursday after posting its fiscal first quarter results and announcing operational changes, which will include layoffs.
Nike posted fiscal first quarter revenue of $11.21 billion, versus consensus estimates of $11.33 billion. That represented a 4% decline from the year-earlier period.
Earnings per share came in at $0.48, down from $0.49 a year ago.
The company said revenues are expected to decline in the high single digits in fiscal 2027. Nike’s gross margin, however, expanded 60 basis points to 42.8%.
The company also announced operational changes in order to reduce costs and operate more efficiently.
“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don’t take that lightly,” wrote CEO Elliott Hill in a letter to employees.
There was some good news. Caitlin Clark’s new signature Nike shoe nearly sold out within the first two hours of going on sale.
But in late August, Dick’s Sporting Goods offered up a brutal warning about its business, in part because Nike is heavily discounting a slow-moving product.
And soccer icon Kylian Mbappe ended his long-term business tie-up with Nike last month and announced he will now be joining Swiss sports giant On.
—The theft by a criminal hacking group of reams of sensitive personal data involving potentially tens of thousands of former and current F.B.I. employees is emerging as one of the worst breaches of sensitive government information, leaving the bureau rushing to protect its personnel as an uncertain deadline loomed.
Nearly a week after the group, known as ShinyHunters, revealed it had pilfered intimate details about bureau personnel from the agency’s jobs portal and threatened to leak them online, F.B.I. investigators are still piecing together how the breach took place and the total damage.
The hack appears to have swept up home addresses, Social Security numbers, secretive job assignments and much more, according to a New York Times analysis of some of the records. Some are already comparing it to China’s breach of more than 20 million records from the Office of Personnel Management over a decade ago, considered so catastrophic that officials and lawmakers vowed to never let something like it happen again.
In a statement on Monday, the agency said it was “working around the clock to investigate the cyber incident involving FBIJobs.gov and is in regular communication with anyone who may be impacted…”
In announcing its hack, ShinyHunters, believed to be a loose collection of young hackers operating across the globe, said it had targeted the F.B.I. as retribution for a public advisory the bureau had issued in the spring, warning that the group was known to harass victims and family members with threatening or coercive maneuvers. In their vote, the hackers demanded that the F.B.I. “correct or simply REMOVE” the advisory or risk further consequences.
In an email to the Times on Friday, ShinyHunters said that the bureau had until the end of Tuesday to fulfill its request, even as the hackers themselves appeared to acknowledge that the bureau was unlikely to acquiesce.
That note left open the possibility that the hackers would not dump the data online, and then on Monday, in a new statement, the group claimed it never intended to do so.
“Since the very beginning we had made our decision that we would never publish this data,” the group said. “We have never intended to nor have we ever planned to.” It added that the hack and threat to the F.B.I. was a “marketing campaign to protect our business” and said that “we are not taking any further actions” with the data, including revealing more about what is contained in the files.
Dutch police on Monday then arrested one of the leaders of ShinyHunters, a 24-year-old man.
—SpaceX put Starship into Earth orbit for the first time on Monday and deployed all 26 Starlink V3 satellites on board, despite an engine going out during ascent, a SpaceX representative said during the company’s live broadcast.
Super Heavy Booster 21 successfully separated from Starship and splashed down in the Gulf of Mexico.
SpaceX shares rose 7% on Friday after the company successfully sent four astronauts to the International Space Station and a Google satellite/ AI computer prototype that is important to that company’s prospects.
Like it was a great week for Elon and Co. [And Tesla delivered more vehicles in Q3 than expected, as reported today, and its shares rose.]
–In its earnings report, Vail Resorts CEO Rob Katz said last winter was “one of the most challenging” in the history of the ski industry. The company’s fourth-quarter earnings, reported Monday, signal another tough winter ahead.
Vail Resorts, whose destinations portfolio includes Vail Mountain, Breckenridge, and Park City Mountain, reported that pass sales through Sept. 18 for the upcoming 2026/2027 North American ski season dropped 12%.
The company reported 502,000 visitors across its properties for the fiscal fourth quarter, well below Wall Street’s projections of 802,000 and a 33% year-over-year decline. Fiscal-year visitations dropped 13% to 15.2 million, under estimates of 15.6 million.
“This past winter was one of the most challenging winters in history across the western U.S. for the ski industry, which negatively impacted financial performance for the year,” Katz said in a news release.
Vail Resorts reported an earnings loss of $5.34 a share for the quarter. Revenue rose 2.5% year over year to $278 million.
While the company sees another tough winter ahead, it does look for a “meaningful recovery” in some respects…but that doesn’t mean much when they already are talking about season passes being down 12%.
–Those not hitting the slopes are seemingly going cruising. Carnival said strong demand and operational improvements provided a lift to sales and profit during the latest quarter, more than offsetting higher fuel costs.
The cruise line said Tuesday that booking trends rebounded meaningfully over the past three months, after extreme geopolitical volatility disrupted typical patterns earlier in the year.
“Things happen in the world, and people hesitate,” CFO David Bernstein said in an interview. “Then they realize the world’s not ending…and people get back to their life.”
Shares jumped 12% on the news, but they have lost nearly a fifth of their value this year.
Carnival said it is already halfway booked for 2027, with both occupancy and pricing at what it called record levels.
Third-quarter total revenue climbed 3.5% to $8.44 billion, topping the Street’s outlook of $8.39 billion.
–I saw a local story on the massive Hudson River Tunnel project to add a vital rail track connecting New York and New Jersey and I can’t help but note that the ‘boring’ machine, where daily progress will be measured by feet, if I heard it right, is 500-feet long and made up of 1,700 pieces, manufactured in Germany. You should see this behemoth.
Foreign Affairs
Russia/Ukraine: Going back to last weekend, Saturday, Ukraine said it struck the Ilsky oil refinery in Russia’s Black Sea region of Krasnodar as Kyiv’s military maintains regular attacks against the Kremlin’s energy infrastructure while fending off waves of drones.
Three people were killed in the operation, a Krasnodar official said.
The independent Ilsky plant has a design capacity of about 6.6 million tons a year and has been repeatedly targeted since the early phase of Ukraine’s campaign against Russia’s energy infrastructure. The loss of fuel supplies has forced Russia’s authorities to impose a temporary ban on most exports of gasoline, diesel and jet fuel.
Russia’s defense ministry said its forces intercepted and destroyed 645 Ukrainian drones overnight. It also said the Russian military had attacked a data processing center in Kyiv, a dry cargo ship in the Black Sea, and targets in Odesa and the surrounding region.
Sunday, Russia and Ukraine exchanged more strikes, killing at least eight people in Ukraine and one in Russa, officials said.
Monday, Russia struck Ukraine’s National Academy of Sciences, killing at least one and injuring six. [This was a particularly heinous attack.]
Wednesday, Russian drone and missile attacks hit energy infrastructure in Kyiv and the nearby areas, Ukrainian officials said, a prelude to another winter campaign aimed at wrecking the national energy system.
Five people were killed, including a child, across Ukraine, President Zelensky said.
Zelensky did say Ukraine had received new air defense support packages in recent days. But they need far more to attempt to make it through winter.
“Since summer, there’s barely been a day without an attack on our energy infrastructure,” said Prime Minister Sergii Koretskyi.
—Russian Foreign Minister Sergey Lavor met with his German counterpart Saturday on the sidelines of the UN General Assembly. It was the first meeting between the two countries at this level since Russia launched its full-scale invasion of Ukraine over four years ago.
German Foreign Minister Johann Wadephul said on social media that he had conveyed to Lavrov that Russia “must end its war of aggression against Ukraine and cease its hostile actions against Germany and its allies.”
Lavrov addressed the Assembly after his meeting with Wadephul, in a speech filled with familiar attacks on the West and defenses of his country’s war on Ukraine. He said that Russia’s fight would be “seen through to the end” and until it eliminated what he said were threats to its security.
Meanwhile, Russia warned NATO it would be ready to resort to nuclear weapons if the Western alliance attempted to cut off Kaliningrad, a Russian exclave that borders the Baltic Sea.
In a document sent to NATO and seen by Reuters, Moscow accused the alliance of a “dangerous and reckless course” that entailed “high risks of the outbreak of a direct armed conflict.”
“Russia will be ready to use the entire arsenal of forces and capabilities at its disposal, including nuclear weapons, in order to defend its territory should NATO countries undertake any attempt aimed at isolating the Kaliningrad Region from the rest of the country,” the diplomatic note said.
The warning highlighted Moscow’s urgent concern at what it has represented as a growing NATO threat to Kaliningrad, a heavily militarized Russian territory that is wedged between Poland and Lithuania and is slightly bigger than the state of Connecticut.
Russian Foreign Ministry spokeswoman Maria Zakharova, in a commentary on the ministry’s website, wrote, “If Europe attacks Russia, it will be a completely different sort of war – a very short war.”
NATO Secretary General Mark Rutte said the alliance had responded to Russia’s message by declaring: “We are a defensive alliance. And stop the nuclear threats. This is absolutely not called for and not helpful.”
—The Zaporishstal steel factory, that had employed 8,500 in the city of Zaporizhzhia, for generations was the biggest and richest source of employment in this major Ukrainian city.
But following a series of Russian missile attacks, the huge factory has “been almost completely destroyed,” said one former worker to the BBC.
Russia fired 17 missiles and killed eight workers and injured 31 more.
By now, all of Ukraine’s steel plants have been hit, some several times.
It’s a key sector of the nation’s economy. Before the start of the full-scale invasion, metallurgy and mining accounted for roughly 10% of Ukraine’s GDP and a third of its exports. It provided employment for more than half a million people, and every 13th job in Ukraine was linked to the industry one way or another.
Today, its contribution to Ukraine’s economy “is probably close to zero.”
—Seoul demanded an apology after President Zelensky unilaterally revealed that two North Korean prisoners were sent to South Korea, which Seoul said was supposed to be a secret transfer. Ukraine denied making such a deal.
The two North Koreans were captured on the battlefield in early 2025.
South Korea’s liberal government worried news of the transfer could trigger an angry response from North Korea and hurt efforts to resume diplomacy between Pyongyang and Washington.
—Editorial / Wall Street Journal
“In the annals of cognitive presidential dissonance, here’s a dubious classic: President Trump has invited Russian dictator Vladimir Putin to the G-20 meeting he’s hosting in December even as Western intelligence services warn that Russia is escalating its hybrid war against NATO countries.
“Mr. Trump is hosting the G-20 heads of state at his Trump National Doral club in December. Mr. Putin has been persona non grata since he invaded Ukraine in 2022, for the obvious reason that he’s responsible for killing hundreds of thousands. The U.S. invitation will give the Russian a photo-op to show Russians that he’s no longer a pariah on the world stage. It’s a global rehabilitation gift even as the Russian public grows tired of the war.
“Mr. Trump might argue that bringing Mr. Putin back into the global fold could make him more likely to end the war. But we’ve heard this for years, and Mr. Putin shows no sign of abandoning his goal of making Ukraine a wholly-owned subsidiary, no matter the brutal cost in blood and money for Russia, Ukraine and the rest of the world.
“The U.S. President hosted Mr. Putin at a bilateral summit in Alaska in August 2025. But the Russian merely pocketed the public-relations blessing from Mr. Trump and changed nothing. He made Trump look like a chump for thinking that their personal ties could change the Russian’s power calculations. That’s not how Mr. Putin thinks.
“Meanwhile, concern grows in Europe that Mr. Putin plans to escalate his current so-called hybrid war with NATO countries….
“The Danish Defense Intelligence Service warned this week that Russia could test NATO resolve in the coming months with a ‘limited military’ attack. ‘The purpose would be to redirect European resources away from supporting Ukraine and to sow division within NATO, should the alliance fail to agree on a collective response,” the DDIS said.
“The Danish alert follows multiple recent warnings from top European officials. They aren’t making it up, as Members of Congress who have received U.S. intelligence briefings have heard similar warnings.
“Would Mr. Trump support a firm NATO response if Mr. Putin strikes? Inviting the dictator to the G-20 is morally offensive. Even worse, it might make the Russian think he could get away with a targeted attack on NATO.”
President Trump is so off-the-wall these days, he recently encouraged President Zelensky to travel to Moscow to meet with Putin, despite repeated past refusals.
Zelensky declined the appeal made in his meeting with Trump at the United Nations, and people familiar with the Ukrainian leader’s position said Trump raising the issue upset him.
When asked by reporters when he would visit Moscow, Zelensky replied: “On a missile,” followed by an expletive.
China: Going back to the Xi-Trump summit last week in Washington, for Xi it’s all about Taiwan and so far, Trump hasn’t publicly responded to Xi’s request that Washington adopt “the correct position of opposing Taiwan independence.” U.S. Ambassador to China David Perdue told Fox News last Friday that Trump hasn’t changed his position. “We don’t support independence,” he added. “But we really don’t support coercion either.”
China wants Washington to say it “opposes” Taiwanese independence, replacing the longstanding U.S. formulation that it “does not support” it. Following through on that move would likely trigger bipartisan blowback from members of Congress who strongly support military backing for Taipei.
But prospects for Trump releasing a planned $14 billion arms package for Taiwan before the Group of 20 summit in December remain low, analysts say. Xi is slated to attend that event in Miami.
Overall, China’s best bet for maintaining stability in the relationship is to leverage its stranglehold over rare earths. Data suggest the U.S. – and most of the world – will remain reliant on China for those magnets through 2030 and beyond, according to a Bloomberg analysis.
[China controls up to 70% of global rare-earth mining, 85% of refining capacity, and about 90% of rare-earth metal alloy and magnet production, according to consultancy AlixPartners. Rare earths, such as yttrium and dysprosium, underpin strategic industries from automakers to chipmakers and defense contractors, representing a critical chokepoint in supply chains.]
Editorial / Wall Street Journal
“The year is 2028, and America faces economic Armageddon. Frontier artificial-intelligence development has been halted and data-center construction frozen while the market is in free fall.
“America’s leading AI labs didn’t decide to ‘pace the frontier.’ Instead the Chinese Communist Party paced the frontier for them: Beijing moved on Taiwan, the critical vulnerability in the U.S.-aligned AI supply chain, first through a blockade, then by invasion….
“Mr. Xi has said the issue of Taiwan can’t be put off forever. He has ordered the People’s Liberation Army to be ready to invade the island nation by 2027. The PLA has restructured its forces, expanded its rocket and amphibious capacity, and conducted an unprecedented tempo of provocative exercises in the Taiwan Strait.
“Taiwan is a free and successful democracy. It is a self-evident rebuttal to Beijing’s techno-totalitarian regime, which sees Taiwan as a threat to its own legitimacy. Taiwan’s prosperity has also transformed the Communist Party’s desire to ‘unify’ the island with the mainland into a first-order threat to the security of the free world.
“America’s economy now runs on AI investment, and the U.S. has wired the most dynamic sector of our economy to a hundred-mile strait 7,800 miles away from Wall Street. America’s AI stack runs through Taiwan because the Taiwan Semiconductor Manufacturing Co. manufactures 90% of the world’s most advanced semiconductors and 60% of all semiconductors.
“Congress passed the Chips and Science Act to reshore semiconductor manufacturing, but the execution was a shambles. The Biden administration buried the program under an avalanche of irrelevant conditions that led to delays, workforce shortfalls and cost overruns. Working to repair the effort, the Trump administration reached a milestone this year when Nvidia announced its advanced Blackwell chips are being produced in volume by TSMC’s ‘fab’ in Arizona. But there was a catch: Those American-made chips still fly back to Taiwan to be ‘packaged’ – the final step that makes them usable. TSMC has announced an advanced packaging plant in Arizona, but it isn’t expected until 2029. Time is running short….
“Beijing would want Taiwan even if it were a barren rock, but this island has become the single point of failure in the single most important technology the Communist Party wants to dominate. Washington, Silicon Valley and Wall Street need to recognize this shift in Beijing’s decision-making as the cost of not taking Taiwan may soon exceed the cost of taking it.
“America holds a thin lead in the AI race. But if Mr. Xi concludes this lead is insurmountable – that he is increasingly on the losing side of a technology gap that will define military power for a generation – the case for his moving on Taiwan still becomes stronger. Why play a losing game when you can flip the board?
“Taiwan’s defense sits at the heart of not only U.S. national-security strategy, but also America’s economic and AI strategies. We must therefore intensify our efforts to arm Taiwan to the teeth. Taiwan has already taken steps to deter an invasion by increasing its overall defense budget to nearly 4% of gross domestic product while greatly increasing its drone capacity. America should support this buildup by clearing the arms sales backlog for Taiwan and streamlining Foreign Military Sales processes….
“(China) isn’t pacing its AI frontier, it is stealing America’s frontier capabilities through covert industrial distillation and the illegal use of advanced chips.
“The biggest threat to humanity isn’t rogue AI; it is AI controlled by China, which would use this transformative technology to take Taiwan and displace America as the world’s dominant superpower.”
Random Musings
—Presidential approval ratings….
Rasmussen: 42% approve of President Trump’s job performance, 57% disapprove (Oct. 2).
A new Wall Street Journal poll has Trump’s approval rating at 37% (61% disapprove), the lowest for a president heading into the midterms since the Journal began polling in 1990, when former President George H.W. Bush was in office.
According to the polling, 65% said the economy was not strong, and 60% said that Trump’s policies have made the economy worse. The poll of 1,500 registered voters was conducted Sept. 16-21.
A new Associated Press-NORC Center for Public Affairs Research poll finds that only 17% of U.S. adults approve of the Republican president’s handling of the cost of living. Just 26% approve of his handling of the economy overall, marking a new low.
A majority, 65%, of U.S. adults now blame Trump’s policies for persistently high costs more than factors outside of his control, signaling growing weariness over his aggressive use of tariffs and continued unhappiness with the war with Iran.
—The key 7th congressional district in New Jersey, my district, features a race between incumbent Republican Rep. Tom Kean Jr. and Democrat Rebecca Bennett.
The two debated for the first and only time Sunday night and all Rep. Kean said of his unexplained four-month absence from his House duties this year was that it was a “medical emergency” and his opponent, Bennett, did not press for more answers and wished him well with his recovery.
Kean, whose district includes Trump’s Bedminster golf club, is walking a tightrope in what positions to back the president on and this race continues to fascinate.
I’m on record as saying I am not voting for Kean because of his failure to tell us, his constituents, just what the heck was going on those four months. It’s the first time in my life I’m not voting Republican for Congress.
[I already sent my mail-in ballot…through the local drop-box.]
—New Jersey Gov. Mikie Sherrill’s approval ratings have held relatively steady more than eight months into her tenure, while her handling of the recent investigation into her now-former lieutenant governor (who was forced to resign following an investigation into sexual harassment allegations) draws even wider support, according to a new Rutgers-Eagleton Poll, that shows 44% of Garden State adults approve of the Democrats’ job performance, 24% disapprove, and 22% are unsure.
The numbers are down one percentage point since the group’s first poll in March.
—President Trump, in an interview with Time magazine, said he regrets nominating each of the three Supreme Court justices he tapped during his first term, criticizing Neil Gorsuch, Brett Kavanaugh, and Amy Comey Barrett.
“I gave them the position of a lifetime, and they vote against me often.”
Asked whether he wants loyalty from his justices, Trump responded, “I do like loyalty, yeah.”
Pressed again, Trump said: “No, I don’t want loyalty. I want good decisions. The tariff decision was disastrous for the country. I want good decisions for the country.”
Trump’s most recent setback in the high court came on Sept. 14, when the justices, in a 7-2 decision, blocked the president’s plan to use the U.S. Postal Service to restrict mail-voting. Gorsuch, Kavanaugh and Baarrett each sided against the Trump administration.
—A lawyer for the death row inmate Christa Pike said she was in critical condition and receiving lifesaving medical care on Thursday, a day after Tennessee’s failed attempt to execute her. Ms. Pike survived two doses of the lethal drug pentobarbital in what was the state’s second bungled execution this year.
Gov. Bill Lee suspended executions in the state earlier on Thursday until the completion of an independent review.
Pike was found guilty in 1996 of torturing and murdering a classmate, Colleen Slemmer, in an attack carried out with her boyfriend and a friend. They slashed at Ms. Slemmer with a box cutter, carved a pentagram into her chest and removed a piece of her skull.
Ms. Slemmer’s mother has long favored Pike’s execution.
Personally, I favor the death penalty, but this sets back support for same in a huge way.
—The number of deaths in Democratic Republic of Congo’s Ebola outbreak has surpassed 4,000, government data showed on Friday, as the worst epidemic in the country’s history resists containment efforts.
—Pope Leo praised the “enthusiasm, energy and commitment” young people bring to the Catholic Church as dense crowds attended an open-air mass in Paris.
An estimated 700,000 people gathered for the Mass celebrated by the Pope from a special altar on the Place de la Concorde, on the second day of his four-day visit to France.
It began after the pontiff rode down the Champs-Elysees Avenue waving to crowds from his open-topped popemobile. That would have been so cool to be part of. Picture all the tourists who made plans to go to Paris a year earlier who had no clue the opportunity they were suddenly being given.
During Saturday’s Mass, the Pope told worshippers that Catholics should not keep their faith to themselves but “let it overflow so that those you meet may be refreshed.”
The leader of the Catholic Church also addressed young people in his Homily, describing them as “today’s Church.”
“How beautiful it is to see your enthusiasm, energy and commitment, and the joy you bring to Christian communities,” he said.
Gerard Baker / Wall Street Journal…on Pope Leo and his reception in France….
“The scale and intensity of the crowds evoked a people yearning to lift their eyes above the storms and stresses of our age. People tired of the disintegration of their societies, the loss of their identity, alarm at the soulless ascendancy of a curious sort of secularism and a relativism that preaches the equality of all faiths and none; fear that the civilization they inherited won’t be around when they are ready to pass something on to their children; alienation at the accelerating technological revolution that threatens their livelihoods, their lives and even what it means to be human. To all this, the successor to St. Peter, atop the rock on which Christ built his church, is a compelling answer.
“There is something simpler too, I think, about the appeal of this humble son of the Midwest. He is the one man in the world most of us can look up to. Everywhere we look, we are led by a cartoon parade of the grotesque, the inept, the forgettable: political leaders of towering vanity and vapidity, a business leadership class that helps itself to greater riches even as it gets preachier with the rest of us, influencers and pop stars and celebrities, a galloping gallimaufry of narcissistic nobodies all desperately squeezing their last little crumb of manna from us.
“God knows, this pope has his critics….
“One of those critics, one of those multibillionaires reshaping and disrupting our world, described Leo this weekend as a ‘useful idiot’ for the Chinese Communist Party. The pope’s offense was to call for some regulation of the development of artificial intelligence to ensure the continued centrality of humans to life on the planet.
“I laughed out loud when I heard that. I thought about all those who had denounced the popes and the church they headed before him: the sans culottes, the guillotinists, the tricoteuses; all the rationalists, the Marxists, the humanists. I suspect popes will be inspiring men and women to simple human goodness long after our politicians and the tech oligarchs who seek to rule us have given up trying to perfect whatever it is they were put on earth to do.”
—We got through September without a single hurricane in the Atlantic basin. With Tropical Storm Hannah failing to attain hurricane status, we now have a chance to make it through hurricane season without a hurricane for the first time in the modern satellite era (i.e., since 1960).
The record is two hurricanes, set in 1982 and 2013. While 1982 was also a super El Nino year, 2013 was an ENSO-neutral year, meaning that neither El Nino nor La Nina were occurring.
—Life along West Coast beaches continues to get more precarious, as an oceanic Kelvin wave, a kind of slow-moving planetary wave that carries energy and warm water across vast distances, is arriving along the California coast, said Daniel Swain, a climate scientist with the University of California Agriculture and Natural Resources.
“Sea levels are going to be noticeably higher than usual,” Swain said.
One hurricane after another is sending large swells from far offshore that are battering Southern California beaches with large waves and rough surf. The effects are compounded by climate change-induced sea level rise and the higher water levels arriving with El Nino.
Kelvin Waves can increase sea levels by another 6 to 12 inches, according to NOAA.
El Nino and high tide flooding usually ends up being a “double whammy,” they said.
—Switzerland – home to the most glaciers in the Alps – lost 5.5% of their ice volume this year, the second-biggest percentage drop on record due to heat waves and low winter snowfall, experts reported this week.
“Alpine glaciers have no chance of surviving in the long term under such conditions,” the GLAMOS Swiss glacier monitoring service and Swiss Academy of Sciences said in a statement released Thursday.
The trend has worsened in recent years: Over the past five years alone, the volume of ice in Switzerland has declined by nearly a fifth, the experts say.
And you saw recently that the Alps aren’t alone, as global warming helped to destabilize a Himalayan slope that collapsed and unleashed catastrophic and deadly flooding across Nepal. And satellites over the last half-century have shown vast shrinkage of glaciers in places like Greenland and Antarctica.
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Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
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Gold $4142…Silver $60.45
Oil (WTI) $91.40…Brent $102.75
Regular Gas: $4.39; Diesel: $6.37 [$3.15 – $3.70 yr. ago]
Bitcoin: $84,308
Returns for the week 9/28-10/2
Dow Jones -1.3% [51177]
S&P 500 -0.3% [7722]
S&P MidCap +0.6%
Russell 2000 -0.2%
Nasdaq +0.5% [27190]
Returns for the period 1/1/26-10/2/26
Dow Jones +6.5%
S&P 500 +12.8%
S&P MidCap +11.0%
Russell 2000 +14.1%
Nasdaq +17.0%
Hang in there.
I need your support, friends! To my many readers in China, you can contribute to!
Brian Trumbore
